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Natural gas heating bills expected to be lower this winter
Nearly half of households in the United States use natural gas as their primary heating fuel, and they can expect a 10% decrease, on average, in their winter natural gas bills this year compared with last year. The decrease is the result of both lower year-over-year forecasted residential prices and a warmer winter compared to last year. The average natural gas consuming household can expect a total winter natural gas bill of $578 this winter, $64 less than last winter's average, according to EIA's Short-Term Energy and Winter Fuels Outlook. Markets are currently characterized by relatively low prices and strong supply.If interested see also:
Heading into the winter, EIA forecasts supplies will be abundant and working inventories of natural gas in storage will be at a record high of 3,956 billion cubic feet (Bcf) on October 31. If weekly injections remain strong in the coming weeks, it is possible that working inventories could surpass 4,000 Bcf. This would exceed the previous record of 3,929 Bcf set at the end of October 2012. EIA projects inventories next March will end this winter at 1,892 Bcf, which would represent a drawdown of 2,064 Bcf. This represents high March levels and a lower winter drawdown than in the previous five years (2011 — 15) —the five-year average end-of-March inventory level is 1,622 Bcf, and the average winter drawdown over these years is 2,176 Bcf.
In addition to forecasts for record storage levels, EIA expects production growth will continue this winter. While production growth has slowed in recent months, EIA expects production will remain well above year-ago levels. This month's STEO projects total dry production will average 75.2 Bcf/d between October and March, about 2.5% greater than the 2014-15 winter.
The projections for heating bills are based on forecasts of residential natural gas consumption and prices. While EIA expects residential prices will remain lower than in previous years, they are not directly correlated with changes in Henry Hub spot prices. EIA projects residential prices overall in the United States to average $9.51 per thousand cubic feet (Mcf) this winter, which is 40¢ lower than the per-unit price last winter. EIA forecast that consumers in all four census regions (West, Northeast, South, and Midwest) will see lower natural gas bills this winter.
The National Oceanic and Atmospheric Administration (NOAA) projects this winter will be substantially warmer than last year in the Midwest, Northeast, and South. In the West, which was warmer than average last year, NOAA expects cooler temperatures.
In 2008, homes heated with natural gas made up slightly more than half of total U.S. homes. Over the past several years, natural gas-heated homes have declined as a share of the total, while homes using electricity as their primary source of heat have increased. This pattern is likely caused by increases in population in southern states where electricity is the predominant source of heat....MUCH MORE
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